Dax Technical Analysis 01/04/2015

I have been sat here for a while trying to think up some ridiculous story to describe as part of an elaborate hoax for April Fools, but the truth is I am somewhat lacking in the creativity department today. Must drink more coffee. So I’ll scrap that idea.

I am told that the CFD markets will be closed Thursday, Friday and Monday for Easter and be open again, at normal hours on Tuesday (not an April fool).

Ok, so the Dax has beaten me up a little bit over the last couple days, but fortunately the positions sizes were not big and I refuse to change my bias, which has rewarded me today. I had two open long positions from just under 12k which were closed at 12075 and I will wait for a pullback before going long again.

Over the last few days we have had our test to the downside, which has held and perhaps now we have room to move again to the upside. My targets long term are still mid 12xxx.

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Dax Support & Resistance

KEY LEVELS

Difference

Daily R2

12200

-59

Daily R1

12067

-105

Value High

12034

-63

Daily Pivot

11991

-28

34 Hour EMA

11982

-19

24hr VWAP

11977

-88

Naked VPOC

11955

-80

Value Low

11918

-98

Daily S1

11858

-74

Daily S2

11782

3

200 Day EMA

10255

17

Dax FXI Analysis

In the short term we are heavily overbought, but this is a common theme with the Dax. However I think a 200+ point rally, in just a few hours of trading taking us from the bottom of the 30 minute channel (on the right on this chart here) to the top of the channel on the 30 minute chart, suggests a need for a settling of price. Perhaps somewhere nearer to 12020. I will ignore the left side of the chart because this is a 5 minute chart with a lot of noise, but it is saying that we may have reached a top for now.

Dax Daily Chart

Same as yesterday, still moving sideways in the large range. Yesterday we corrected quite a lot of Monday’s gains, but today seems to be piling the pressure back on a break to the upside.

Dax Daily Chart
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Dax Intra-day Chart Analysis (4 hour)

Here are the support zones marked in blue. You may be able to see the two channels I have drawn, highlighting the bearish channel that has been broken and tested and perhaps kissed goodbye as it continues its march forwards. The ATH is the most clearly defined key resistance to take out.

Dax Intra-day Chart (4 hour)
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Dax Intra-day Chart Analysis (30 minute)

We have already taken out the weekly R1, perhaps this will be a place to hold as support and go long. The 34 period hourly EMA is clearly showing sideways movement but the most recent fractals are showing signs of a trend up, with higher highs and higher lows.

Dax Intra-day Chart (30 minute)
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Dax Intra-day Chart Analysis (5 minute)

As I write this, we have already taken out the daily R1 and are trading above 12100. The most recent high (from yesterday) of 12122 will be the first target, otherwise perhaps we fall back to the R1 and see if it becomes support.

Dax Intra-day Chart (5 minute)
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Dax Volume Profile Analysis

What have we got left to target here? We have basically taken out everything already. So just out of shot at the top, we have the dotted lines of the composite 5 day volume profile which are the deviation lines and the deviation high from the 5-day composite is around 12150. This is not an unreasonable target, being that this will be the last trading day until Tuesday.

A drop towards VWAP from current levels is not unlikely, I like a buy from 12036 zone as there is a cluster of volume and previous levels.

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I was expecting to reach somewhere nearer to 9560 to complete another leg down, but we have raced away and now actually closed above 10,000 again. If we are simply retracing the bearish week last week, then targets will be between 10133-10275. If we take out 10275, then we are primed to test 10350 and higher.

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So 5m bullish divergence on the Dax, S2 on the weekly pivot point indicator, lower band touch on the H4 moving average envelope and all of this happening after a decent bearish run. If you’re not already short, it’s probably too late. Maybe wait for jumping in, but it’s your money.

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On the 5 minute chart, we are quickly approaching the S1 for the day, we are finding bullish divergence regularly but of course when you’re in a strong trending move (lower in this case) sometimes you will receive false signals. That’s why when you trade those signals your risk management is crucial, so you can afford the losers.I may look to the higher timeframes to find the divergence signals.

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Another bearish candle yesterday and we are trapped, once again inside the large trading range from the end of March. 11500 is the trend defining level at the moment, a break below this could signal a drop to 11k but I expect to see a lot of support.

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